Under free competition, and without government support and enforcement, there will only be limited scope for fractional-reserve banking. Banks could form cartels to prop each other up, but generally cartels on the market don’t work well.
The natural tendency of government, once in charge of money, is to inflate and to destroy the value of the currency. To understand this truth, we must examine the nature of government and of the creation of money.
For a long time, banks have sought to keep construction loans “on the books” to collect more interest payments. With a recession looming, these long loans are likely to become delinquent.
Economist Antony C. Sutton understood one of the most fundamental economic truths: gold is money. Thorsten Polleit reviews Sutton’s classic book, The War on Gold.
By ignoring monetary aggregates, central banks may cut rates with no real effect on the productive economy and solve nothing. There may be a significant contraction in economic activity even if rates decline, as credit availability worsens even with declining rates, but markets keep inflating the financial bubble.
Economist Antony C. Sutton understood one of the most fundamental economic truths: gold is money. Thorsten Polleit reviews Sutton’s classic book, The War on Gold.
Since 2019, the total national debt has increased by 25 percent, but interest paid on the debt has increased by 75 percent. More specifically, interest on the debt came in at nearly $573 billion in 2019, but it will top $1 trillion in 2024.
Bob comments on the key disputes from his recent debate with Dean Baker, underlying the differences between the Austrian and Keynesian frameworks.
The reason why the economy is not showing significant negative effects from recent drops in the money supply is because the amount of liquidity injected in 2020–21 was so huge that there is a long lag effect as savings are consumed.
One of the biggest and most pervasive myths in modern-day economics is the myth of the omnipotence of the Federal Reserve.
